A consortium led by Swire Properties and Sun Hung Kai Properties (SHKP) paid a lower than expected $1.677 billion for a residential site in Shau Kei Wan, sparking fears of a further drop in home prices. Analysts attributed the low price to the weak state of the housing sector and escalating price war between developers. DBS analyst Winnie Chiu said the price was about 10 per cent below her expectations of $1.9 billion and indicated developers' caution over the market's future. 'The low price will further depress the already depressed property market' she said. She expected property prices in the secondary market to drop further as a result of the sale. Swire Properties has a 50 per cent stake in the winning consortium, with SHKP holding 30 per cent and China Motor Bus subsidiary Island Communication Enterprises the remaining 20 per cent. The consortium defeated six rival bids, involving more than 10 leading developers. Based on a gross floor area of about 700,000 square feet, the sale price represented an accommodation value of $2,397 per sq ft. Francis Lau & Co (Surveyors) managing director Serena Lau Sze-wan expected the overall development cost to be about $3,600 per sq ft and prices of finished flats at about $5,000 per sq ft. She said this was even lower than the $5,500 per sq ft to $6,000 per sq ft being charged in Lei King Wan, close to Aldrich Bay. Swire Properties said the Aldrich Bay site would accommodate about 900 units with average flat size of about 800 sq ft.